Latest / Closing the Deal with Fexingo: Sales, Negotiation, and Revenue Conversations for Operators / How One Rep Won by Asking for a Smaller First Order
Transcript
- Lucas: So there's this moment in a deal where you've done everything right — you've mapped the committee, you've surfaced the budget, you've handled the competitor comparison — and then the buyer says, 'We're ready to move forward, but we need to start small.' Luna: And most reps hear that and immediately think, 'They're not serious. They're testing me. I need to hold firm on the full deal.' Lucas: Right. The instinct is to dig in or try to upsell on the spot. But there's a rep — let's call him Dan — who had the opposite reaction. Dan sells a fairly expensive analytics platform, annual contracts in the six-figure range, and he had a deal with a mid-market retail company that was basically done. The VP of data wanted it, the head of engineering was on board, the use case was solid. Luna: Classic late-stage momentum. Lucas: Exactly. Then procurement stepped in and said, 'We cannot sign a $180,000 annual contract right now. Can you do a quarter?' And Dan's first thought was, 'That's a 75 percent haircut. My manager will kill me.' But instead of pushing back, he said yes — but with a twist. Luna: What was the twist? Lucas: He offered to cut the initial order to $70,000 — about 60 percent less than the original — but he added a structured six-month check-in where both sides would review usage and decide together whether to expand to the full scope. He didn't discount the per-unit price. He just reduced the quantity and built in a formal re-evaluation point. Luna: So he kept the pricing integrity but lowered the total commitment. That's smart. Lucas: It is. And the deal closed in three days. Procurement approved it because the financial risk was tiny relative to the original. The VP of data got her tool. And six months later, they expanded to the full $180,000 — plus an extra $20,000 in add-ons. Luna: Okay, I love this. And it ties into something I've been thinking about — we run this show without ads, and that only works because listeners who find value sometimes choose to support it. If you're the kind of person who appreciates a tactic you can actually use, and you want to keep these conversations free of sponsor interruptions, you can find the link at buy me a coffee dot com slash fexingo. Lucas: Totally. And the same principle applies here — small commitments that build into bigger ones. So Dan's move worked because he reframed the conversation from 'how much can we cut?' to 'what's the smallest step that proves this works?' Luna: Which changes the buyer's psychology entirely. They go from haggling to problem-solving. Lucas: Exactly. And there's research behind this. A 2023 study in the Journal of Marketing found that when buyers perceive a purchase as high-risk, they become more price-sensitive and more likely to stall. Reducing the initial commitment lowers that perceived risk, and the buyer's brain shifts from 'should I do this?' to 'how do we make this succeed?' Luna: That's a huge shift. And it's not just about the money — it's about the emotional load. Lucas: Right. The procurement person isn't just worried about $180,000. They're worried about explaining a failed project to their boss. A $70,000 pilot with a six-month review is much easier to defend. Dan essentially gave them an off-ramp if things went south, and that made them comfortable saying yes. Luna: But what about the rep's commission? If Dan was on a standard plan, he just cut his own payout by 60 percent. Lucas: That's the tension. Dan took a hit upfront. His commission on that first order was maybe $7,000 instead of $18,000. But he calculated that if the expansion came through — and it did — his total commission on the deal would be higher than if he'd walked away or tried to force the full contract and lost it. Plus, the customer became a reference account. Luna: So it's a bet on future value. But not every rep has the patience — or the manager — to allow that. Lucas: That's the real-world constraint. Dan's manager was skeptical but let him try because the alternative was losing the deal entirely. And Dan had data from previous expansions to show that the tactic worked. He'd done it twice before with smaller accounts and both had grown to full contracts within a year. Luna: So part of the strategy is having proof that the expansion will happen. If you're a rep and you haven't tracked that, you're flying blind. Lucas: Absolutely. You need to know your own metrics. What's your average time to expansion? What's the average growth rate? If it takes 18 months just to get back to the original deal size, the math might not work. Luna: Right. So this isn't a universal play. It's situational. When does it work best? Lucas: Three conditions. One: the buying committee has at least one vocal skeptic — usually finance or a senior exec who's risk-averse. Two: the product or service has a clear, measurable impact that can be demonstrated in a few months. Three: the rep has a relationship with an internal champion who will advocate for the expansion at the check-in. Luna: That champion piece is huge. Without someone inside pushing for the full rollout, the pilot can just become a permanent small deal. Lucas: Exactly. And Dan was careful about that. He got the VP of data to agree upfront to be the internal sponsor for the six-month review. She basically committed to making the case internally if the pilot delivered. So the expansion wasn't just hoped for — it was engineered. Luna: That's the difference between a tactic and a strategy. A tactic is asking for a smaller order. The strategy is building a path to the full deal with someone accountable on the other side. Lucas: Well said. And there's another angle here: the smaller order also changes the sales cycle itself. A $70,000 deal moves faster through legal and procurement than a $180,000 one. Fewer signatures needed, less due diligence. Dan shaved weeks off the close time. Luna: And speed matters because every day the deal is open, something can go wrong — a competitor swoops in, a budget freeze hits, the champion leaves. Lucas: Exactly. So by making the deal smaller, Dan actually made it more likely to close. And once it closed, he had a foot in the door. The switching costs for the buyer go up once they've implemented the tool, trained their team, and started seeing results. Luna: So the small order is almost like a loss leader, but without actually losing money on the unit economics. Lucas: Right. You're not discounting the price. You're just reducing the volume. The per-unit margin stays the same. So if you're a subscription business with high gross margins, this is a no-brainer. If you're selling hardware with thin margins, it's trickier because the fixed costs of onboarding might eat into the smaller deal. Luna: Good point. This is really a SaaS-native move, or at least a service business move. Lucas: I'd agree. But it can work in other contexts too. I know a rep who sells industrial sensors — physical products — and she did a version of this. She offered to start with a single production line instead of the whole factory. Same principle: reduce the scope, prove the ROI, then expand. Luna: And how did that go? Lucas: She closed the pilot in two weeks. The full rollout took nine months, but it happened. The key was that the pilot was designed to generate data the champion could use to justify the full investment. The sensors on that one line reduced downtime by 12 percent, and the plant manager presented that number to the CFO. Luna: So the rep didn't even have to sell the expansion — the data sold it. Lucas: Exactly. And that's the ideal outcome. Your job as a rep is to design the small deal so that it creates its own case for the big deal. Luna: That's a great framing. So if a listener wants to try this next week, what's the first step? Lucas: Look at your current pipeline. Find a deal that's stuck on price or risk. Map the buying committee and identify the skeptic. Then draft a proposal that reduces the initial commitment by 50 to 70 percent, but includes a structured review point — three months, six months — where you'll jointly assess the results. And get the champion to agree to be the internal advocate at that review. Luna: And don't forget to track your expansion rate. If you try this five times and only one expands, the math might not work. Lucas: Right. But if you've got a solid product and a clear ROI story, the expansion rate should be high. Dan's was north of 80 percent on these small-start deals. Luna: Eighty percent. So the risk is actually low if you pick the right deals. Lucas: Exactly. It's a deliberate, strategic choice — not a concession. And that's the mindset shift. Most reps see a smaller order as a loss. Dan saw it as an investment. Luna: I think that's the real takeaway. It's not about the discount. It's about redesigning the entry point so the buyer feels safe saying yes. Lucas: And then you've got a relationship, not just a transaction. Which makes the expansion conversation a lot easier. Luna: Alright, I'm going to try this on my next deal. I'll let you know how it goes. Lucas: Please do. And if you're listening and you try it, drop us a note. We'd love to hear your story. Luna: That's it for this episode of Closing the Deal. Until next time, keep the conversation going.